Core Values of Passive Investing

• Asset allocation is the most important determinant of returns
• Markets are efficient
• Passive investing is the winner’s game
• Active investing is the loser’s game
• Risk and reward are related
• Price matters, so do transaction costs and expense ratios
• Market timing and stock picking don’t work
• Speculating is not investing
• Effective diversification reduces risk
• Dissimilar price movement diversification reduces risk
• Small cap stocks outperform large cap stocks
• Value stocks outperform growth stocks
• Global diversification adds value and reduces risk
• Investment policy is the most effective antidote to emotions
• Focus on the long term, not the short term
• Asset class/index funds are the preferred investment option